"Free market" is what a free individual will pay for what he wants to buy, in the absence of legal restraints on either the buyer or the seller. Anything else is the imposition, by force, of *someone's* conception of what should be bought and sold and what the exchange price should be.
That is, to belabor the point, the opposite of freedom.
What about the dozens to hundreds of drugs that fail the tests for a variety of reasons and at different stages of the process?
The few drugs that do pan out MUST pay the costs of all the failures, plus produce a profit for the company. Or it won't be in business long to produce more wonderful new drugs.
Unless I'm quite confused I don't see drug companies reporting 50% to 80% profits.
The average profit margin of the pharmaceutical companies in the Fortune 1000 list is 16% (profits as a percent of revenue). This is in line with the profit margins of the banking (13%), diversified financial (11%), tobacco (11%), and real estate (10%) industries (Fortune, 2002)1 . None of these industries has the need to pour money back into research that the pharmaceutical industry does.
This is from 10 years ago. Though I suspect they aren't much different now.
Apple profits are over 40%. Isn't a new drug that saves lives worth something vaguely resembling the rewards for a new iPad?